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Exhibit 7.4: A Functional Structure with an Export Department

Exhibit 7.4: A Functional Structure with an Export Department

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Foreign Subsidiaries

•• Subunit

Subunit ofof the

the multinational

multinational company

company that

that isis located

located inin

another

another country

country

•• Types

Types ofof foreign

foreign subsidiaries

subsidiaries

•• Minireplica

Minireplica subsidiary:

subsidiary: smaller

smaller version

version ofof the

the parent

parent

company

company

•• Uses

Uses the

the same

same technology

technology and

and producing

producing the

the

same

same products

products as

as the

the parent

parent company

company

•• Transnational

Transnational subsidiary:

subsidiary: has

has no

no companywide

companywide form

form

or

or function

function

Each

Each subsidiary

subsidiary contributes

contributes what

what itit does

does best

best

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Foreign Subsidiaries

•• Many

Many subsidiaries

subsidiaries are

are neither

neither minireplicas

minireplicas nor

nor

transnationals

transnationals

May

May take

take different

different forms

forms or

or functions

functions



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Foreign Subsidiaries

•• Multinationals

Multinationals choose

choose the

the mix

mix ofof functions

functions based

based on:

on:

•• The

The firm’s

firm’s multinational

multinational strategy

strategy or

or strategies

strategies

•• The

The subsidiaries’

subsidiaries’capabilities

capabilities and

and resources

resources

•• The

The economic

economic and

and political

political risk

risk ofof building

building and

and

managing

managing aa subunit

subunit inin another

another country

country

•• How

How the

the subsidiaries

subsidiaries fitfit into

into the

the overall

overall multinational

multinational

organizational

organizational structure

structure

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International Division

•• Responsible

Responsible for

for managing

managing exports,

exports, international

international sales,

sales,

and

and foreign

foreign subsidiaries

subsidiaries

•• Usual

Usual step

step after

after export

export department

department

•• Deals

Deals with

with all

all products

products

•• Manages

Manages overseas

overseas sales

sales force

force and

and manufacturing

manufacturing sites

sites



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Exhibit 7.5: An International

Division



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Organizational Structures to

Implement Multinational

Strategies

•• Reasons

Reasons toto abandon

abandon the

the international

international division

division

•• Diverse

Diverse products

products overwhelm

overwhelm capacities

capacities ofof

multinational

multinational

•• Not

Not close

close enough

enough toto local

local markets

markets

•• Cannot

Cannot take

take advantage

advantage ofof global

global economies

economies ofof scale

scale

or

or global

global sources

sources ofof knowledge

knowledge

Several

Several options

options available

available toto deal

deal with

with these

these

shortcomings

shortcomings

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Worldwide Geographic

Structure

•• Has

Has geographical

geographical units

units representing

representing regions

regions ofof the

the

world

world

•• Prime

Prime reason

reason isis toto implement

implement aa multidomestic

multidomestic or

or

regional

regional strategy

strategy

•• Organizational

Organizational design

design with

with maximum

maximum geographic

geographic

flexibility

flexibility

•• Separate

Separate divisions

divisions for

for large

large market

market countries

countries

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Exhibit 7.6: Royal Vopak

Geographic Structure



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Worldwide Product Structure

•• Worldwide

Worldwide product

product structure

structure

•• Gives

Gives product

product divisions

divisions responsibility

responsibility toto produce

produce

and

and sell

sell their

their products

products or

or services

services throughout

throughout the

the

world

world

•• Implements

Implements strategies

strategies that

that emphasize

emphasize global

global

products

products

•• Provides

Provides an

an efficient

efficient way

way toto organize

organize and

and centralize

centralize

the

the production

production and

and sales

sales ofof similar

similar products

products

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Exhibit 7.4: A Functional Structure with an Export Department

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